Pound dips after exit polls indicate hung parliament

Pauline Gross
June 9, 2017

Theresa May's promise throughout was to offer her catchphrase "strong and stable leadership" - instead she may end diminished - but only of course the real results will determine through the course of the night what really happens next.

The FTSE 100 has in recent months tended to trade higher when the pound falls, as a result of its high global exposure, but analysts said that significant uncertainty now would likely lead to investors turning cautious on any and all United Kingdom assets.

One of May's top ministers, Home Secretary Amber Rudd, faced a recount in her south coast constituency, an indication that the result there was very close.

Indeed this, together with clear evidence of a Conservative revival north of the border, may yet provide the Tories with the extra seats that they might need to secure an overall majority.

Atrocities near Parliament, a Manchester concert venue and London Bridge have left Britain on high alert, with the official threat level at severe, the second-highest rating, indicating an attack is "highly likely".

Britain's Prime Minister Theresa May, centre, gestures at a rally while on the general election campaign trail, in Birmingham, England, Wednesday June 7, 2017.

With talks of unprecedented complexity on Britain's departure from the European Union due to start in just 10 days' time, there was uncertainty over who would form the next government and over the fundamental direction Brexit would take.

The forecast is much better than expected for the opposition Labour Party, which had been expected to lose seats.

"The market will be praying that this exit poll has got it wrong", said Lee Hardman, a currency analyst at MUFG.

May called the election seven weeks ago - three years ahead of schedule and with her party was well ahead in the polls.

Polling stations have just closed and counting has begun with early indications the United Kingdom could be headed for a hung parliament.

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Britain's two most popular newspapers, the right-wing tabloids The Daily Mail and The Sun, appeared to agree, questioning May's future in commentaries saying her gamble in calling the snap election appeared to have "spectacularly misfired" and caused a "disastrous loss of seats".

In one she said Labour would hire more police officers at a cost of 30 pounds ($39) each.

If the exit poll is correct, Labour, led by veteran socialist Corbyn, could attempt to form a government with those smaller parties, which strongly oppose most of May's policies on domestic issues such as public spending cuts.

May had warned repeatedly during the campaign that if she lost only a few seats then Corbyn could take office, presiding over a "coalition of chaos" involving the SNP and Lib Dems. How he would steer Britain through Brexit negotiations has not been explained in detail. Corbyn accused the Conservatives of undermining Britain's security by cutting the number of police on the streets.

Her opinion poll lead narrowed sharply, although the consensus before the exit poll remained that she would win a majority.

John Curtice, who oversees the exit poll for a consortium of broadcasters, said Friday that the Conservatives' final tally might be a bit higher than 314, but it was extremely unlikely they would get a majority.

And Peter Kellner, the former head of polling giant YouGov, said initial results had showed massive swings to the Tories in Labour's northeast stronghold.

It projects 34 seats for the Scottish National Party and 14 for the Liberal Democrats.

George Osborne, the former finance minister who stepped down at the election, told ITV that the results were "catastrophic" for his party.

The options include a minority government formed by May's Conservatives, or an informal "confidence and supply" arrangement with Unionist lawmakers from Northern Ireland, he said.

Other reports by GizPress

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